CentralNic’s revenue almost doubled in 2014, helped by the launch of new gTLDs.

The UK-based registry today reported annual operating profit of £497,000 ($759,000), down from £694,000 ($1.05 million) in 2013, on the back of revenue up 99% at £6.06 million ($9.25 million).

Billings– money taken but not yet recorded as revenue — was up a whopping 154% at £9.89 million ($15.1 million).

Part of the reason for the growth was the launch of new gTLDs last year.

CentralNic acts as the registry back-end for eight TLDs that launched last year, including runaway volume leader .xyz, which has about 880,000 domains in its zone file today.

Another big contributor was Internet.bs, the Bahamas-based registrar that CentralNic acquired for $7.5 million last year.

The registrar had about 400,000 legacy gTLD domains under management at the end of the year, according to DI’s records.

Both new gTLDs and Internet.bs started contributing to revenue in the second half of the year.

CentralNic also said that its new “enterprise” division, which sells premium domains and offers consulting and software, was a growth factor.

CEO Ben Crawford told the markets that the new gTLD opportunity has so far been “softer” than expected.

Only a small number of retailers received their accreditations from ICANN to sell domains under the new TLDs in 2014, and a lack of public awareness pending the launches of the “superbrand TLDs” such as .google, .apple and .sony, meant that the market for new TLDs in 2014 was softer than had been projected by ICANN and other industry experts. It was essentially limited to domain investors and other early adopters.

Opinion in split in the industry on how much reliance can be put on what Crawford calls “super-brands” to do the heavy lifting when it comes to public awareness of new gTLDs.

It’s been the subject of some speculation how renewals would be treated by NetSol, but now we know.

Customers, at least in cases reported by DI readers, are being sent renewal notices for their .xyz bundles in the same mailshots as for their .com domains.

Clicking the “Renew” button in these emails takes registrants to a NetSol page on which they can select which of their products they would like to renew.

All, including the .xyz products, are pre-selected for renewal but may be deselected.

Pricing is set at $15.99 for the .xyz domain, $15.99 for the private registration and $25.19 for the email service. That’s a total of $57.17.

Here’s a screenshot of the shopping cart with the pricing (I’ve redacted the domain). Click to enlarge.

The original email sent by NetSol to customers last June, said:

We want to show you how much we appreciate your loyalty by rewarding you with complimentary access to a 1-year registration of a .XYZ domain, one of the hottest new domain extensions. .XYZ domains are proving to have broad appeal and also be extremely memorable. In addition to your complimentary domain, you’ll also receive Professional Email and Private Registration for your .XYZ domain – free of charge.

…

If you choose not to keep this domain no action is needed and you will not be charged any fees in the future. Should you decide to keep the domain after your complementary first year, simply renew it like any other domain in your account.

The fine print read:

Offer applies to first year of new registrations only. The offer is not transferable and is only available to the recipient. After the complimentary first year the .XYZ domain name and its related services shall expire unless you actively renew the .XYZ domain name and its related services at the then-current rates.

Please note that your use of this .XYZ domain name and/or your refusal to decline the domain shall indicate acceptance of the domain into your account, your continued acceptance of our Service Agreement located online at http://www.networksolutions.com/legal/static-service-agreement.jsp, and its application to the domain.

There’s concern from some registrants that customers may renew their .xyz services without really understanding how they ended up in their account in the first place.

.xyz currently has over 857,000 domains in its zone file.

XYZ.com CEO Daniel Negari was recently quoted as saying that roughly 500,000 of those were not freebies.

Verisign, the $7.5 billion .com domain gorilla, has sued upstart XYZ.com and CEO Daniel Negari for disparaging .com and allegedly misrepresenting how well .xyz is doing.

It’s the biggest legacy gTLD versus the biggest (allegedly) new gTLD.

The lawsuit focuses on some registrars’ habit of giving .xyz names to registrants of .com and other domains without their consent, enabling XYZ.com and Negari to use inflated numbers as a marketing tool.

The Lanham Act false advertising lawsuit was filed in Virginia last December, but I don’t believe it’s been reported before now.

Verisign’s beef is first with this video, which is published on the front page of xyz.com:

Verisign said that the claim that it’s “impossible” to find a .com domain (which isn’t quite what the ad says) is false.

The complaint goes on to say that interviews Negari did with NPR and VentureBeat last year have been twisted to characterize .xyz as “the next .com”, whereas neither outlet made such an endorsement. It states:

XYZ’s promotional statements, when viewed together and in context, reflect a strategy to create a deceptive message to the public that companies and individuals cannot get the .COM domain names they want from Verisign, and that XYZ is quickly becoming the preferred alternative.

As regular readers will be aware, .xyz’s zone file, which had almost 785,000 names in it yesterday, has been massively inflated by a campaign last year by Network Solutions to push free .xyz domains into customers’ accounts without their consent.

It turns out Verisign became the unwilling recipient of gtld-servers.xyz, due to it owning the equivalent .com.

According to Verisign, Negari has used these inflated numbers to falsely make it look like .xyz is a viable and thriving alternative to .com. The company claims:

Verisign is being injured as a result of XYZ and Negari’s false and/or misleading statements of fact including because XYZ and Negari’s statements undermine the equity and good will Verisign has developed in the .COM registry.

…

XYZ and Negari should be ordered to disgorge their profits and other ill-gotten gains received as a result of this deception on the consuming public.

The complaint makes reference to typosquatting lawsuits Negari’s old company, Cyber2Media, settled with Facebook and Goodwill Industries a few years ago, presumably just in order to frame Negari as a bad guy.

Verisign wants not only for XYZ to pay up, but also for the court to force the company to disclose its robo-registration numbers whenever it makes a claim about how successful .xyz is.

XYZ denies everything. Answering Verisign’s complaint in January, it also makes nine affirmative defenses citing among other things its first amendment rights and Verisign’s “unclean hands”.

While many of Verisign’s allegations appear to be factually true, I of course cannot comment on whether its legal case holds water.

But I do think the lawsuit makes the company looks rather petty — a former monopolist running to the courts on trivial grounds as soon as it sees a little competition.

I also wonder how the company is going to demonstrate harm, given that by its own admission .com continues to sell millions of new domains every quarter.

But the lesson here is for all new gTLD registries — if you’re going to compare yourselves to .com, you might want to get your facts straight first if you want to keep your legal fees down.

The .xyz and .country gTLDs are currently dominating the league table of most-popular new gTLDs, but massive pop-up advertising campaigns using junk domains can account for the majority of their leading sites.

But almost two thirds of those 163 domains appear to be throwaways that receive traffic not because they’re attracting visitors, but because they’re used to serve pop-up advertising, in some cases via adware.

The trend has been visible for a few months now, restricted almost exclusively to .xyz, but over the last two weeks .country has also started to be used in this way.

That’s interesting because, unlike .xyz, .country is not a low-cost gTLD. Go Daddy currently sells it for $39.95 per year.

(UPDATE: As Andrew points out in the comments, Uniregistry is selling .country names for $1 for the first year, which almost certainly explains the .country bump.)

Almost 100 of the top 163 new gTLD domains comprise two unrelated dictionary words put together to make something nonsensical.

Domains such as iciclecellar.country, laborervolcano.country, classkitten.country, sweepstakesglove.country, rewardmen.country, installationdesk.country have recently joined have joined the likes of vasegiraffe.xyz, cactusstew.xyz, bedcrow.xyz, notebookwrist.xyz, wishgrass.xyz, pencilkite.xyz and basketriver.xyz on this list.

As far as I can tell, they’re all registered via Uniregistry and using its free Whois privacy service to mask the identities of the registrants.

Visiting these domains in your browser will either result in an error — where I suspect the site is checking the referrer before deciding whether to show a page — or will send you on a merry redirect chain that terminates in an affiliate marketing sign-up page.

Some of the domains have been discussed in online forums as serving up pop-up ads, which would account for large amounts of traffic and high popularity.

Pop-up ads may be annoying, but they’re legal and — unlike spam and malware — not usually a violation of gTLD registries’ terms of service.

Whether benefiting from adware would leave a registrant in violation of a registrar or registry’s ToS is also a fuzzy area.

But for the new gTLD industry, which is currently in a mindshare-building mode, this kind of use does not make for great optics. If internet users see new gTLDs most often in an unwanted context, it could impair their trust in the new gTLD environment.